How do we show proof of funds please?

smelltheroses_2

We are about to start negotiating on a house, we are engaging in a private sale. The sellers have asked for our offer to be made in writing, which is fine and sorted, but have also asked for proof of funds along with the initial offer. My initial feeling is that we wont send any proof of funds until a price is agreed first. My feeling is that if we send them our mortgage offer in principle, they'll be able to find out how much we could borrow, allowing them to see how far they can up their price and hold out on negotiations!
Any responses on this?
Secondly, the mortgage would be for roughly 50 %, the rest is tied up in my house's equity, which would be available once I sell. The mortgage was paid off in full recently, so what ever I get for my house goes towards the one we're buying - how do we show proof of this?
Thirdly, about 20K that would go towards buying the house is in savings, how do I prove this?
Im not sure we should be sending sensitive financial details and documents directly to the seller at negotiation stage - would you recommend all this going to their solicitor to verify, since not selling via estate agent? How reasonable is it that we request this, since this is a private sale between ourselves and the vendors?

I really need to make a decision on this today as they are expecting our offer to be put to them by tomorrow morning - any advice gratefully recieved!

DVardysShadow

In your position, I would absolutely insist that the process was set up with a negotiation subject to proof of funds and only prove the funds once a price is agreed.

When it comes to proving funds, you need your own solicitor on side to confirm how much mortgage you are applying for, how much equity you will bring from the current property and how much savings. Solicitor should confirm that you have presented evidence for all 3.

hazyjo

An EA would often ask for proof of funds. They won't need to see all of the funds, usually just a bank statement an amount that would prove sufficient for a deposit. You could alternatively get a mortgage in principle offer from your provider (if you don't have already) and show the funds on a bank statement. I'd not let them copy it or anything, but would let them view.

I definitely would not do this until we'd agreed a price! You might never agree a price, in which case it's none of their business as far as I'm concerned... It wouldn't show them what you could borrow as they'll have no idea of your salaries, nor what the equity is in your current house. I just don't think it's right that they need to see this before the offer's accepted. Maybe if it were through an agent, but not direct.

They're basically doing everything an agent would do, which leads me to think they've either taken advice or had a deal fall through. Not that it matters, but might be worth bearing in mind when it comes to choosing a survey - just in case there were problems with the house.

Is the chain complete? I'd not be making any firm offers until it was.

Jx

kingstreet

How far along is the sale of your current home?

Is the vendor of the new property aware you have a property to sell?

smelltheroses_2

We have had an offer on our house and another interested buyer, both cash buyers with nothing to sell....going to accept one of the offers later today before we proceed to offer on the house we're interested in. They are aware that we have offers on the table. They havent, as far as I am aware, found anywhere themselves as yet, but are prepared to go into renting, should we buy from them.

CautiousWithMoney

If they insist either:

1) photocopy the AIP then tippex out the amount, photocopy again and send it.

2) copy the PDF into paint, blank out the amount and save as .jpg and print or attach to email

smelltheroses_2

Had a chat with my estate agent and he said a private seller is not legally obliged to look at proof of funds, unlike estate agents, he thought it was unusual they asked, since it’s not necessary for them to do so and advised me not to email or give any copies of our finances over to them. He suggested if they need to see it, it would have to be in person and not to leave a copy with them, as even estate agents aren’t allowed to photocopy any proof of funds apparently. I also asked my solicitor, they thought seeing the mortgage lender agreement would be enough, as there is no way to show that the rest of the funds would be proceeds from the sale of my house.
I think we will wait to show proof of funds once a price is agreed and then show them to solicitors, that seems the most comfortable and sensible option to me!
I am desperately trying NOT to get my hopes up, my previous buyer pulled out a fortnight ago then the house we had offered on went off the market, all on the same day, so I am aware it could all go belly up!
Thanks for advice....please keep fingers crossed for me! x:o

DVardysShadow

Even estate agents are not legally obliged to look at proof of funds!